Disney’s Overtime Deal

Santa Clara, CADisneyland workers on November 4 got the green light to settle their California overtime class action lawsuit, but a federal judge needs “further convincing” before approving one-third of the $2 million settlement for attorney fees.

Judge James Selna said that upwards of $660,000 in legal fees is higher than the Ninth Circuit's "benchmark" of 25 percent. Although this issue is not a factor in preliminary approval, the judge said that class counsel must provide relevant information to justify such an amount. As well, the judge raised an eyebrow regarding $10,000 "enhancement awards" to both named plaintiffs, Jose Valenzuela and Erica Cho.
 

THE CALIFORNIA LABOR CODE

Disney hasn’t been “the happiest place in the world” for Valenzuela and Cho. They filed the class action lawsuit in Orange County Superior Court back in March 2017 against Walt Disney World for $3.8 million, alleging that Disney failed to provide their employees meal and rest periods. The two cast members claimed that employees who had to work through their lunch break were not paid more than regular wages, and therefore owed overtime compensation, in accordance with California labor laws. The lawsuit states that Disneyland failed to provide cast members uninterrupted thirty-minute meal periods and ten-minute rest breaks.

The California labor code requires employers to provide all non-exempt hourly employees with thirty-minute meal periods before an employee exceeds working for five hours and requires paid off-duty rest breaks.

In addition, Disney failed to accurately apply certain pay incentives for workers who have additional responsibilities or who work hours outside 9 a.m. to 5 p.m., such as the second or third shift, according to Law360. Disney employees said the incentives were supposed to be tacked onto regular and overtime wages, but they were calculated as such to underpay employees owed premium payments for their additional work, such as leadership of Disney cast members, selling tickets and performing bag checks. Further, in addition to challenging how the company rates pay, the workers claimed that the entertainment leviathan paid premium wages — about 20 cents or 30 cents extra an hour depending on the specific position — as a "credit against overtime wages that were not paid."

The lawsuit also claims that Disney didn’t give its employees with complete and accurate wage statements, which failed to show the correct amount of wages earned, the correct federal overtime rates for any overtime worked, and the correct penalty payments or missed rest periods.

California Labor Code §226 states that all employers must provide each employee with an accurate itemized wage statement in writing which shows gross wages earned, all applicable hourly rates applied during a pay period, and the corresponding amount of time worked at each hourly rate.

ANOTHER CALIFORNIA WAGE AND HOUR VIOLATION

The Happiest Place in the World is no stranger to wage and hour lawsuits. The Associated Press reported in March 2017 that some Florida workers made less than the federal minimum wage after uniform or “costume” expenses were deducted. The Walt Disney Co. agreed to pay .8 million in back wages to its employees for violating minimum wage and overtime rules as part of an agreement with the U.S. Department of Labor (DOL)

The DOL said more than 16,000 workers at the Disney Vacation Club Management Corp. and Walt Disney Parks and Resorts in Florida were owed back wages. As well, time and payroll records were also not properly maintained by the resort, and workers weren’t paid for duties performed before their shifts started and after their shifts ended – two more labor law violations which are widespread in other industries. Despite settling wage and hour lawsuits for millions of dollars, employers like Disney don’t correct their practices and operate in compliance with the law, as evidenced by the latest $2 million settlement.